|ASTI Holdings has sealed a deal to sell its STI Group for S$90 million cash (net proceeds: S$72.8 million), with S$38 million in dividends too payable by the buyer.
ASTI announced today that it has entered into a sale and purchase agreement with Shanghai Pudong Science and Technology Investment Co., Ltd. (“PDSTI”), in relation to PDSTI’s acquisition of 100% of several wholly-owned subsidiaries of ASTI (forming STI Group).
ASTI is a SGX-mainboard listed company providing integrated range of services comprising Backend Equipment Solutions & Technologies and Services in the semiconductor industry.
ASTI’s book value stood at S$50.6 million as at end-2017 while its market capitalization was S$47.8 million last week (29 March).
The sale of STI Group is subject to the approval of ASTI shareholders at an extraordinary general meeting to be convened.
Upon completion, ASTI’s financial position will be substantially strengthened with net proceeds (after expenses) estimated to be S$72,800,00:
♦ The net asset value per share is expected to increase by 104% to 14.44 Singapore cents, compared to ASTI’s last trading price of 7.3 Singapore cents on 29 March 2018.
♦ Cash per share will increase by 202% to 13.68 Singapore cents.
DATO’ Michael Loh Soon Gnee, Executive Chairman & CEO of ASTI, comments, “ASTI Group has many valuable assets and technologies in our subsidiaries and associates, and it’s encouraging to see these values being recognized by investors.
"STI Group has been an important part of our business with good profit contributions and the sale will unlock the value that we have built over years.
-- Dato' Michael Loh,
ASTI Holdings "The stronger cash position and better business prospects will also allow us to explore avenues to bring value to our shareholders through dividends and / or share buyback."
"While ASTI is financially and technologically adequate in its current position, the transaction will substantially increase our cash balance and shareholder value.
"The new robust balance sheet will give all our growing business units the necessary working capital, as well as the resources for us to explore more opportunities through M&A and achieve accelerated growth through the strategic inflection point."
ASTI shares closed at 9.7 cents in this morning's session, up 33%.
The positive news lifted ASTI subsidiary Dragon Group 28% to 2.3 cents.
ASTI undertakes that the aggregated amount of profits (before payment of taxes) of the STI Group in 2018 and 2019 will not be less than $17,000,000.
STI Group designs, builds and markets semiconductor manufacturing equipment used in the production of Integrated Circuits, which are widely used in industries such as automotive, communications, consumer electronics, data processing and aerospace. With a broad spectrum of quality products, STI Group has been profitable over the past few years.
PDSTI, established in 1999, is a Shanghai-based investment company specializing in domestic and oversea investments in the high-tech industries.
Well-known for its mergers and acquisitions strategy in the semiconductor space, PDSTI has recently led the launch of a 10 billion RMB investment fund with primary focus on semiconductor manufacturing equipment and material. The fund invests in global opportunities, as well as help optimize the business and enhance the value of its portfolio companies in the Chinese semiconductor market.
The SGX had queries regarding the deal. Read ASTI's response, dated 9 April, here.